NEW DELHI (Reuters) -- Global carmakers and suppliers in India's flood-hit southern city of Chennai, an area known as India's Detroit, are being forced to keep factory gates closed until Saturday at least, which is likely to hit local sales and exports in coming months.
Carmakers such as Renault, Nissan Motor, Hyundai Motor and tire supplier Apollo Tyres will decide on Saturday whether to resume production, whereas BMW will keep a plant closed until Monday, as heavy rains inundate the city's streets limiting movement.
Ford Motor Co. shut production for a second day and it was unclear when it would resume operations.
"The impact on the whole ecosystem -- car manufacturers and component makers -- will be really significant," said Abdul Majeed, automotive head at consultant PwC, adding that for those that export more than they sell in India it could be worse.
India is increasingly becoming an export hub with carmakers shipping vehicles to countries in Africa and Latin America, and even parts of Europe. In the year ended March, Indian exports of cars, trucks, buses and two-wheelers rose 15 percent to about 3.6 million, industry data showed.
Carmakers such as Hyundai, India'a biggest car exporter, BMW, Renault and Nissan have production facilities in just one Indian city and this incident could force them to consider forming a more sustainable continuity plan, said Majeed.
"Climate is a big issue ... Manufacturers will need to think about de-risking," he said, adding that as exports from India rise, carmakers may need to think about having two or more plants.
Incessant rainfall in the country's fourth most-populous city and cut off more than three million people from basic services.
Natural disasters have disrupted Asia's auto industry in the past. In 2011, an earthquake and tsunami in Japan hit car production, and floods in Thailand the same year impacted auto part makers affecting vehicles produced in North America.
Billions in losses
The industrial trade organization Assocham estimated losses to businesses from the record downpour could reach more than 150 billion rupees ($2.2 billion).
“The city has come to a virtual standstill and is in the grip of fear and panic,” Assocham said in a statement today, urging the federal government to “immediately” handle this “extreme crisis” with a suitable package.
As many as 34 aircraft, including those of budget carrier SpiceJet Ltd., were stuck at the airport.
Prime Minister Narendra Modi said today he would depart for Chennai for a survey, while the Indian Air Force pressed three aircraft to help evacuate hundreds of passengers stranded at the local airport, which is expected to be shut at least until Dec. 6.
The government of the state of Tamil Nadu, whose capital is Chennai, said it deployed senior officials to undertake precautionary measures in three districts, distribute food and shift people to higher ground. Television images showed residents wading through almost neck-deep, brown water in many neighborhoods as local fishermen helped ferry the elderly, women and children in boats.
As authorities struggled to deal with the disaster, activists, film stars and executives started campaigns on social media including Twitter and Facebook for rescue and relief. The Associated Chambers of Commerce and Industry of India termed the situation as “total chaos.”
Some relief came today, from the weather department, which downgraded an earlier forecast for heavy rainfall to “light to moderate” for the next few days in the city.
Radio stations and television channels formed partnerships to help people reach out to families and authorities, while Twitter started as many as three hashtags to connect the stranded and rescue volunteers. Facebook activated its recently- introduced "Safety Check" feature that identifies and checks on people in the vicinity of natural disasters.
Power outages to prevent electrocutions added to the misery. One Twitter user sought help to rescue 200 colleagues from an office building with no electricity, while another looked for food to feed his infant.
Assocham, the trade body, attributed the disaster mainly to “unplanned growth.” “Authorities in all metros should review their disaster management plans at regular intervals and make long-term plans to improve drainage systems,” it said in the statement.
Bloomberg contributed to this report.